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Water St. infill developers requesting PILOT

This lot on West Water Street will see several changes, including a new building, following the implementation of Elmira's $10 million Downtown Revitalization Initiative plan.(Photo: Amanda Renko / Staff photo)Buy Photo

The developers of a four-story building planned for downtown Elmira will request property tax breaks from the Chemung County Industrial Development Agency.

Park Grove Realty LLC, the Rochester-based company proposing the building on West Water Street, is working with IDA officials to develop a 20-year payment-in-lieu-of-taxes agreement.

The proposed PILOT would help make the mixed-use building feasible, particularly in its early years, said Andrew Bodewes, a partner in Park Grove Realty and an Elmira native.

Mixed-use downtown development follows trends seen in Syracuse, Rochester, Buffalo and other upstate cities, Bodewes told the IDA's board of directors Wednesday. But the proposed building will be the first new construction in downtown Elmira in recent history, and the mixed-use concept hasn't yet been proven here.

“It’s a risky project,” Bodewes said. “This is paving new ground here in Elmira. This kind of thing hasn’t been done.”

A preliminary PILOT structure discussed at Wednesday's meeting would have Park Grove paying taxes only on the land for the first four years a new building is occupied, an annual payment of $7,200.

In the fifth year, Park Grove would pay 10 percent of taxes on the improvements to the property, estimated at $21,302. In year seven, that number would increase to 20 percent, and in year nine to 30 percent.

From there, the percentage of taxes paid would rise by 10 percent every three years through the end of the agreement, leaving Park Grove with an estimated property tax payment of $179,220 by year 20.

A concept rendering of an infill building proposed for an empty site on West Water Street in Elmira.(Photo: Provided)

Park Grove will construct the building on properties where Marvin's, Harold's, Rosenbaum's and Damomics used to be — 104, 106-112, 114 and 118-120 W. Water St. The Chemung County Capital Resource Corp. currently owns the parcels.

Plans for the building call for about 16,500 square feet of commercial space and 51 market-rate apartments — 27 one-bedroom and 24 two-bedroom units.

Residential rents are proposed at $1,095 for one-bedroom apartments and $1,295 for two-bedroom apartments, for a total of $729,260 in annual rental income, excluding vacancies. Commercial rents are estimated at around $14 per square foot, for around $215,000 in annual income.

Park Grove has had discussions with some local companies for office space in the new building and is working to identify a possible restaurant or brewery for the first floor, Bodewes said Wednesday.

The $14 million project is being financed with $4.3 million of Elmira's Downtown Revitalization Initiative funding, which is expected to be awarded in June; $2.3 million in Restore NY Communities Initiative grant funding previously attached to the parcels; a commercial loan of up to $6.2 million; and $1.16 million in equity investment.

Bodewes said the PILOT would go a long way toward ensuring the building's success.

"What you have then, essentially, is an investment in the future," he said. "It gives us the time to make this work."

IDA Executive Director Mike Krusen plans to have a final assistance package ready for the board's consideration sometime in June, he said Wednesday.